My objects fade out when I increment the opacity of my background image
The Setup you're currently using is quite common in modelling, as you usually want to compare a blueprint or sketch to your model and trace some elements of that. A feasible value for the Opacity would be around 0.3, so you can see your model more clearly, but still compare to your underlay.
If you want the underlay to really be behind the model you're creating, set the Toggle Switch just below the Opacity slider to 'Back'. See comparison screenshots below:
Front

Back